VICTORIA — Despite losing a round in B.C. Supreme Court Tuesday, Auditor General John Doyle is far from blocked in his bid to review the controversial waiver of $6 million in legal fees in the BC Rail case.

“It would be wrong to conclude that the result in this case represents the triumph of secrecy over transparency and accountability,” wrote Chief Justice Robert Bauman in an effort to head off defeatist interpretations of this week’s ruling.

The chief justice indeed denied Doyle’s application for access to additional documentation related to the legal defence of the two aides in the corruption case, whose legal costs were indemnified by taxpayers, then forgiven after they pleaded guilty.

But at the same time as he upheld the fundamentals of solicitor-client privilege, he also reaffirmed Doyle’s power to audit the controversial indemnity:

“The auditor general enjoys a wide power to examine and audit the government side of the arrangement and to assess whether it is operating economically, efficiently and effectively.”

The chief justice emphasized that Doyle had gained access to “considerable material” on which to base his review of both the indemnity and the waiver.

The 42-page judgment stated as a matter of “fact” that the B.C. Liberal government had provided “all relevant materials” in its possession, withholding nothing on grounds of cabinet confidentiality or the wish to protect dealings with its own legal counsel.

Yes, government lawyer Richard Butler had to file an amended affidavit last fall, correcting the record on what was in the government’s possession regarding the defence billings.

“Much was made of this about-face in the media,” as Bauman noted, adding that it was surely a “regrettable” error. But it made “little difference” to his findings because the material was already on file and available elsewhere.

The chief justice noted that the auditor general had also gained access to material needed to conduct a comparative audit of the government practice of indemnifying the costs of politicians and public officials in other legal proceedings.

Some 100 of those instances, going back as far as the New Democratic Party time in office, are on the list for review.

Four individuals who were on the witness list in the BC Rail case have agreed that the auditor general can review information in the possession of the government regarding their publicly funded legal costs. Similar access was volunteered by 33 individuals who were indemnified in other legal proceedings.

Then, too, the auditor general gained access, via an earlier court proceeding, to material in the hands of the government (accounts, disbursements, other documents) regarding the legal billings on behalf of Dave Basi and Bob Virk, the two ex-aides who pleaded guilty to corruption in the BC Rail case.

But Basi and Virk withheld access to a limited amount of documentation that was still in the hands of the independent reviewers of their legal billings.

The details were not specified in the court judgment. But I gather the contents could have revealed aspects of their legal strategy, perhaps including the names of individuals who cooperated with the defence.

The auditor general sought that material along with blanket access to the files in the hands of legal counsel in other cases where the government granted legal indemnities. And that, as the chief justice succinctly put it, “has led to these proceedings.”

Bauman turned down the application because granting it would have shredded solicitor-client confidentiality: “All citizens must be able to freely discuss their legal positions with their lawyers, secure in the knowledge that this relationship — that between solicitor and client — is as sacred as any secular business relationship can be.”

But he rejected Doyle’s claim that without blanket access to the legal files, he couldn’t do his job.

“The auditor general has access, on a voluntary disclosure basis, to extensive materials otherwise subject to the solicitor-client privilege of many third party recipients of special indemnities,” he wrote.

He further cited the “pithy” view of former auditor general Wayne Strelioff, submitted as part of a friend-of-the-court brief:

“An auditor general’s difficulty in obtaining information does not prevent him from complying with standards. He is directed by, and complies with, standards by explaining in his audit report to the legislative assembly, the effect of his inability to obtain required information or evidence on his or her findings and conclusions.”

In short, Doyle should do his best with the information he has obtained and tell the public what he knows.

Which was pretty much the advice from John van Dongen, the independent MLA who obtained access to the court (at his own considerable legal expense) to support Doyle in his application.

Van Dongen admitted to being “a bit disappointed” Tuesday. But he praised the chief justice for the clarity of his ruling and for underscoring that it need not be a reversal for openness and transparency.

Doyle, in van Dongen’s view, has “sufficient information to do a credible audit” of the notorious $6-million indemnity and waiver.

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